The Maritime Transport Committee (MTC) of the Organisation for Economic Co-operation and Development (OECD) has issued a Discussion Paper on “Maritime Security – Ownership and Control of Ships: Options to Improve Transparency.” *(See link below)*
Persons or organisations wishing to comment on the discussion paper are invited to do so by Friday 27 February 2004. See below for an executive summary the Paper.
The MTC considered a first draft of this report at its meeting in November 2003. At that meeting it decided that the report should be declassified and issued as a discussion paper in order to elicit views from as many interested parties as possible. Following this period for comments, the MTC Secretariat will revise the report and re-submit it to the Committee for its further consideration and possible future action.
At this stage this discussion paper represents the results of research and analysis undertaken by the MTC Secretariat, and does not necessarily reflect the views of either the Organisation or its member governments.
**Bahamas Quality Register**
The Bahamas today is the world’s third largest ship register, and ranks as number one in cruise and passenger ships.
J. Mervyn Jones, Director of the Bahamas Maritime Authority, says that one of the reasons why The Bahamas is popular as a flag is that the ship registry is part of a wider appeal of The Bahamas as a major tourist attraction and financial centre. He points out, *”In each of these industries – tourism, finance, and shipping – the aim of the Bahamian Government is to focus on quality.”*
Industry practitioners also say that another undoubted reason for the popularity of The Bahamas Ship Register is that the legislative and judicial systems in The Bahamas are closely modeled on that of the United Kingdom – and therefore familiar to most banks, lawyers, and ship owners – although with enough independence from it to assure the most flexible approach without compromising legal security.
Since 1976, The Bahamas has been a member of the International Maritime Organisation (IMO) and a party to that institution’s principal conventions relating to safety of life at sea and protection of the marine environment. Starting in November 1999, it also has been a member of the IMO’s Governing Council, represented at this level by the Bahamas High Commissioner to the United Kingdom.
The Management Board for the BMA, while almost completely autonomous, remains an arm of the Bahamas Government. It is charged with responsibility for monitoring maritime activity and increasing the Bahamas Ship Registry.
The Bahamas points to its lead as flag for cruise ships as a strong indication of the reputation it enjoys in international shipping. The BMA says owners of cruise ships are particularly sensitive to public perception, and a high quality managed register is integral to maintaining the nation’s profile in the market place.
The OECD Discussion Paper considers possible measures to increase transparency of beneficial ownership from three different perspectives:
·Approaches to increase transparency in corporate vehicles that operate from jurisdictions that promote or permit anonymity.
·Approaches to increase transparency of ownership in shipping registers.
·Self-protection measures by governments.
The report provides a wide palette of possible measures that could increase transparency. It also acknowledges that most of these will require the co-operation of administrations that at present consider it appropriate and commercially beneficial for them to offer corporate vehicles and mechanisms that provide anonymity, as well as the shipping registers that facilitate such anonymity.
A substantial change of culture amongst these jurisdictions, and the clients they serve, will be needed if the issue of anonymity is to be successfully addressed in a global context.
Adopting an approach that provides confidentiality (as opposed to anonymity) may offer the possibility of a way forward acceptable to jurisdictions, shipping registers and beneficial owners alike. This would mean that beneficial ownership details would be available to the appropriate authorities when necessary, but that commercial confidentiality would also be preserved.
Finally, the report notes that if these measures are not taken up by those jurisdictions that provide anonymity, then governments facing security risks may at certain times need to take self-protection measures. These could be draconian and intrusive, and to some degree measures of last resort, but the reality remains that they could be seriously considered if security threats (or, worse still, actual terrorist action) forced the hands of those governments.